Tax & Legal

In two decisions from today the European Court of Justice commented on the conditions under which an individual may obtain redress following a decision of a court or tribunal that is contrary to EU law. It confirms, inter alia, that the rule breached must confer rights on individuals and that the wrongful failure by the national court or tribunal to question the Court of Justice as to the interpretation of that rule may help to establish liability.

The Baden-Württemberg Tax Court decided that maintaining a double household cannot be justified in the absence of a permanent residence at the out-of-town work location if the employee lives in a motorhome there during the week but regularly returns to his family home in the motorhome on weekends.

In a most current judgment, the Supreme Tax clarified the procedural and substantive handling of a late filing penalty when a VAT assessment is amended to a taxpayer's benefit (surplus) during ongoing litigation.

The Federal Office for Economic Affairs and Export Control (BAFA) recently published two guidance documents regarding the application procedure designed to clarify the requirements set forth in the Industrial Industrial Electricity Price Directive, which took effect on 7 May 2026.

Following a request for a preliminary ruling from Belgium, the General Court of the EU held that a business owner must proportionally adjust the original input tax credit for a commercial building if he transfers the business and, at the same time, leases the building to the transferee on a VAT-exempt basis.

The European General Court of the EU handed down its preliminary ruling on the VAT treatment of the contribution of immovable property to a wholly owned company. The court found, among others, that EU members generally cannot restrict the no-supply treatment for full asset transfers unless justified to prevent competition distortion, tax evasion, or tax avoidance.

In a recently published judgment, the Supreme Tax Court decided that contributions made by parents to a support association for their children’s private school may, under certain circumstances, be treated as deductible school tuition for income tax purposes. However, expenses for lodging, care, and meals are not eligible.

2026年8月12日、ドイツ連邦政府は、2026年次税制改正法案（JStG 2026）を閣議決定しました。本Newsflashでは、本法案のうち日系企業の実務に関連性の高い主要論点に絞って概要をご紹介します。

The European Commission adopted Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union (TFEU) to abusive exclusionary conduct by dominant companies. The adoption of the guidelines marks the end of a three-year process where the Commission consulted extensively with stakeholders.

The new External Audit Regulation (EAR) replaces the previous regulations from 2000 and are designed to modernize and expedite external tax audits. The tax administration should focus even more strongly on matters relevant to tax risks, particularly cross-border intra-group transactions involving transfer pricing issues.

NIS2 is the European Union’s second directive on network and information system security aimed at strengthening cybersecurity across critical sectors and digital infrastructure. It is much more than just an update to the cybersecurity requirements. Its implementation is not merely an IT project.

In a most current judgment, the European Court of Justice held in favor of the applicant, namely that adjustments of the transfer prices of motor vehicles between manufacturers and distributors based on the warranty costs and operating costs incurred by the purchaser are not consideration for a supply of services subject to VAT. However, with one caveat: The situation would be different if the parties concluded a service agreement to that effect.

In a recently published decision, the Supreme Tax Court held that, when determining a late filing penalty as part of a discretionary measure of the tax authorities pursuant to Section 152 (1) Sentence 1 of the General Tax Code, the frequency of missed deadlines must be taken into account even in cases of refunds.

Payments made by the purchaser of a parcel of real estate to a third party constitute consideration within the meaning of Section 9 (2) Number 3 of the Real Estate Transfer Tax Act only if the third party is in such a powerful legal position to prevent the purchaser from acquiring the property, and the purchaser is aware of these circumstances when making the payment.

In a recent decision, the Supreme Tax Court held that, in the absence of an explicitly prescribed filing deadline, the general statute of limitations comes into play when requesting a withholding tax refund. The implementation of this provision does not constitute a violation of the free movement of capital.

In a most recently published judgment, the Supreme Tax Court decided that freelance professionals who voluntarily keep accounts and draw up annual stock inventories cannot determine their VAT payable by using the so-called cash method (at the time remuneration is received) rather than on the basis of the agreed remuneration (as invoiced).

If a civil service pension is split internally under the Pension Equalization Act, the tax-free allowance for pension income and also the additional allowance must be calculated for the person eligible for equalization in the year in which the claim arose, i. e., the year in which that person first was entitled to receive the pension. With its decision, the Supreme Tax Court confirmed the opinion of the Federal Ministry of Finance (BMF) published in October 2013.

Under Section 13 (1) No. 4c of the Inheritance Tax and Gift Tax Act a family home may be transferred tax-free from a parent to a child upon the parent’s death if the parent lived there personally prior to death, the child moves in immediately after the death, and the living area does not exceed 200 square meters. According to the Supreme Tax Court, even a jointly used garden and associated pathways may be eligible for tax exemption.

In a decision on 24 June 2026 and published on 20 August 2026, the German Supreme Tax Court addressed the tension between domestic tax law rules on hidden profit distributions and international tax treaty protections under the Germany-Cyprus Double Taxation Agreement (DBA) 2011.

In a most current circular, the Federal Ministry of Finance (MoF) comments on the disclosure of tax administrative acts by making them available for data retrieval effective 1 January 2026, as well as on legal issues concerning the application of the revised version of Section 122a of the General Tax Code.